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Biden Administration reveals Plan to reduce Prescription-Drug Costs

June 7, 2024: On Tuesday, Global drugmaker Merck charged the Biden administration over Medicare’s unique capabilities to substantially reduce drug costs for seniors under the Inflation Reduction Act, the beginning salvo in the pharmaceutical industry’s actions to weaken the agenda.

In a scathing complaint pointed out in federal court in Washington D.C., Merck accused the negotiation strategy as a “sham” and “tantamount to extortion.”

The drugmaker blamed the federal state for employing what the company characterized as an unconstitutional scheme to take private property for usage by the public without just compensation, violating the Fifth Amendment.

The Inflation Reduction Act, which became law the previous summer, was a considerable achievement for President Joe Biden and Democrats in Congress, who have long pushed to authorize Medicare to combat rising drug prices.

The pharmaceutical industry has fiercely fought the law, arguing it will stifle further drug products.

Merck said the Department of Health and Human Services compels companies to enter into an interpretation that effectively dictates the price of a medicine at a 25% to 60% discount under threat of daily excise taxes that are several times better advanced than the medication’s daily revenue.

Merck has requested a judge to stop HHS from driving the drugmaker to participate in the program.

“Under the IRA, the State will requisition Merck’s patented pharmaceutical products and share them to Medicare beneficiaries through forced sales,” the company’s legal team wrote in the complaint.

“Those forced sales coerced by the danger of draconian penalties that the Government has admitted no manufacturer could ever rationally afford to pay will deny Merck of control and title to its personal property,” Merck’s lawyers stated.

Merck also argued in its lawsuit that Medicare’s new powers to negotiate prices damage the group’s free speech rights under the First Amendment. The drugmaker discussed the Inflation Reduction Act forces companies to partake in a “political deception” that presents the program as a negotiation for fair prices.

“Conscripting groups to actual state extortion is the sort of parroted orthodoxy that the First Amendment’s compelled-speech doctrine forbids,” Merck’s lawyers wrote.

The AARP, the effective lobby group meaning people older than 50, said the Medicare negotiations would keep billions of bucks for seniors, many of whom cannot afford medicine drugs.

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